SE Asian currencies nosedive

SE Asian currencies nosedive

SINGAPORE (AFP): Malaysian's central bank intervened yesterday in currency markets to check the slide of the beleaguered ringgit, as southeast Asian currencies fell amid rumors of more economic troubles in the region, dealers said.

The central Bank Negara, which on Thursday denied its governor Ahmad Don had quit, stepped in to limit the rise of the greenback at 2.6515 ringgit.

"Bank Negara had been absent from the market for sometime now and when the ringgit fell quite sharply today they intervened," a dealer said, adding that in early London trading funds chased the greenback higher against the ringgit.

"We heard that there was also buying of the dollar in the forward market, which means that the funds are targeting higher levels for the U.S. dollar against the ringgit," said Alison Seng, of U.S. research house Standard and Poor's MMS in Singapore.

The ringgit ended Asian trading Friday at 2.6505 to the dollar, compared with Thursday's close of 2.6425.

The Malaysian unit and other southeast Asian currencies had come under relentless attacks since Thailand effectively devalued the baht on July 2.

The closely-watched baht ended slightly higher at 30.70 to the U.S. dollar in offshore trading, from Thursday's close of 31.03.

The Indonesian rupiah closed yesterday at 2,593 to the greenback from 2,590. 50, amid rumors the central bank wanted to widen further the daily trading band of the currency and perceived losses suffered by several Indonesian banks with unhedged U.S. dollar positions.

The band was widened early last month in an apparent bid to make it more difficult for speculators to target their attacks on the rupiah.

A tight monetary policy by the central Bank Indonesia to prop up the rupiah had pushed up short term interest rates.

The fall in the ringgit, as well as the spate of negative news in the region, also dampened the Singapore dollar which dipped Friday to 1.4770 against the greenback from Thursday's 1.4730.